When the Thailand–Australia Free Trade Agreement (TAFTA) was concluded, many dismissed it as largely irrelevant to the day-to-day business decisions of Australian companies in Thailand. Recent developments in Thailand may, however, make the TAFTA an important safeguard for Australian companies doing business in the Thai market.
Recent media reports have suggested that Thailand's military-backed government is proposing new restrictions on foreign investment. These restrictions could have serious implications for Australian investors in the country, such as gold mining company Kingsgate Consolidated Limited, steel manufacturer Bluescope Steel Limited and insurance and financial institution QBE Insurance.
The TAFTA's Investment Chapter provides protections for the way investments are treated once established, and provides rights to investors to initiate dispute settlement proceedings against measures imposed by Thailand.
The TAFTA is just one of a wide range of international treaties that deal with investment to which Australia is party. The investor–state dispute settlement provisions of these agreements have not, to date, been used by Australian investors. Nonetheless, with the imposition of measures such as those proposed by Thailand, Australian investors should be taking the lead of investors overseas and considering their options under the relevant international treaties.
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